As more missing funds allegations surface, 1Malaysia Development Bhd (1MDB) must issue a joint statement with International Petroleum Investment Corp (IPIC) to refute all doubts and suspicion that billions of ringgit of 1MDB funds have gone unaccounted for.
 

Ten days after allegations surfaced that a US$1.4 billion payment in 2012 from 1MDB to Abu Dhabi’s IPIC, The Wall Street Journal (WSJ) reported yesterday that another US$993 million remain unaccounted for.
 
Apparently, officials in the emirate were trying to trace the sum that 1MDB reportedly paid to IPIC and this sum is not reflected in the latest IPIC financial statements for the year ended December 2014.
 
1MDB claimed in its March 2014 financial statements that in November 2014, it redeemed US$1.22 billion from its US$2.318 billion of funds mysteriously “invested” in the Cayman Islands.  However, the proceeds were instantly and “substantially utilised to pay debt interest, Aabar options, working capital.”
 
As reported by The Edge Weekly previously, the sum of US$993 million from this redemption was utilised to buy back the options granted to IPIC to acquire up to 49% of its two energy subsidiaries Powertek Investment Holdings and 1MDB Energy (Langat) Sdn Bhd.
 
Now the fear is that not only is the amount of US$993 million “missing”, in addition to the US$1.4 billion exposed earlier, the IPIC financial statement disclosed that 1MDB still owes IPIC the amount of US$481 million in relation to the termination of the options.
 
I had also previously asked repeatedly in Parliament as well as via media statements for 1MDB to clarify the actual amount paid and is payable to IPIC.  However, all queries were stonewalled and no answers, other that the standard non-answers, were forthcoming.
 
Similarly, 1MDB’s latest statement in response to the latest expose by WSJ did not shed any light as to the actual whereabout of the US$993 million other than to regurgitate whatever that is stated in its March 2014 accounts.  1MDB said :
 
"What we can confirm is that the notes to the 1MDB 31.03.2014 audited financial statements clearly describe the source of funding and purpose of the payments for the option termination, which for the avoidance of doubt, is structured as a deposit pending determination of the final settlement amount… 1MDB can confirm that pursuant to the payment made by 1MDB, the options were in fact terminated."
 
The above does not at all answer the allegations made by WSJ.  If 1MDB did indeed pay the sum of US$993 million to IPIC to terminate the options, why can’t 1MDB just state definitively the sum that has been paid and that IPIC has confirmed receipt of the monies ?
 
Why can’t 1MDB provide a confirmation to Malaysians as to the amount which is still to be paid and disclose the options termination agreement ?  Why hide behind the dated March 2014 financial statements, especially since the above payment in November 2014 is a mere footnote without the necessary details as it is a “subsequent event” to the closing of the accounts ?
 
Instead, 1MDB chose to qualify its statement by claiming that “1MDB cannot speak on behalf of Aabar or IPIC nor can we comment on the accounting arrangements of third parties.”
 
It is actually very simple for 1MDB to rubbish the reports by WSJ or in fact any other news agencies it deems spreading “malicious reports”. All 1MDB needs to do is to issue a joint statement with IPIC to provide a consistent and clear clarification on where the US$1.4 billion “refundable deposit” collateral parked with IPIC is as well as the US$993 million payment to buy back the above options from IPIC have gone to.

The credibility of WSJ would be completely crushed.
 
The fact that IPIC, a company which is subjected to corporate governance regulations by the London Stock Exchange, has to date refused to corroborate the statements made by 1MDB or deny the reports by WSJ raises big question marks on the honesty of the 1MDB executives.
 
1MDB laments “the severity of the unproven allegations, the malicious insinuations made and the impact on the 1MDB rationalisation plan.”  1MDB is again being clever with words.  In reality, 1MDB is frustrated with its inability to stop the truths from surfacing and the impact on its ability to cover up the billions of ringgit lost to misappropriation and embezzlement.
 

Tony Pua